Decatur residents challenge report about senior tax breaks
By William Solomons, contributor
Seniors age 65 and older living within the Decatur School District have been granted a senior tax exemption that has been active for more than three years.
The exemption, which will expire in 2021 unless it is renewed, was created to slow the growth of the school district, encouraging seniors to hang onto their property instead of selling it to new families with new children that would enter into the schools. The theory was that it would cost more to educate these students than the tax break would cost the district.
However, a study conducted by Georgia State University’s Center for State and Local Finance found that the exemption wasn’t effective and actually ended up costing the City Schools of Decatur roughly $3.41 million per year.
The study is an integral part of the discussions about whether to renew these exemptions.
But the integrity of the study was questioned recently by Decatur residents Robert and Adele Pauley, who claimed the report wasn’t appropriately representative of Decatur’s population and that it contained glaring errors that undermined the report. The Pauleys have lived in Decatur for about 35 years and are currently using the homestead exemption.
“If it goes away it’s going to impact our ability to stay in Decatur,” Adele Pauley said.
It would be the same for many other seniors in Decatur, she said. The Pauleys describe themselves as “data wonks.”
Robert Pauley, an international business development director, questioned three aspects of the report: a table title, the percentage of senior Decatur residents reported and the way certain properties — or parcels — are considered.
The main concern Robert Pauley raised was concerning how those parcels are counted.
He said that according to the data in the report some properties were granted the exemption even though having a designation other than strictly residential.
Hans Utz, the former Deputy COO of the City of Atlanta who writes occasionally writes for Decaturish, was asked to take a look at Pauley’s claims. He agreed that the designations raised some concerns.
“I’m surprised that commercial and institutional properties would receive residential exemptions,” he said. “It is possible that there are complexities in the underlying data with how things are categorized. But I agree with Mr. Pauley that at a minimum it raises questions that should be answered.”
Adele Pauley, who works at a management and information technology consulting firm, outlined the issue further.
“They are using invalid data – you can’t count commercial and institutional with single-family/condo/townhouse as they don’t qualify,” she said. “It must be the primary residence of someone over 65. If you are a renter, then you don’t get the exemption.”
She continued, saying that the purported errors led to errors in how much money the school district saved by seniors staying in their homes.
“They are overreporting the number of properties getting the exemption. They are trying to inflate the amount of money – which is more than offset by the amount of high density and commercial buildings around the city,” Adele Pauley said.
However, Peter Bluestone, an author of the report and researcher within Georgia State’s Center for State and Local Finance, said that sometimes zoning and planning designations don’t always line up, leading to inconsistencies that could lead to a misrepresentation of some data.
“Generally, the planning designation and zoning are consistent, but sometimes a planning designation will be put in a place and will [have properties that are] grandfathered [in with] other uses that were put in prior,” Bluestone said.
What this means is that a house could be built in the 1980s, and then in 2010 the City of Decatur could rezone that house’s plot as commercial, leading to it being both designated as a commercial and residential district.
Bluestone said this could be a reason why some senior exemptions were being listed as being on commercial or institutional properties.
Another concern that Robert Pauley had was that table 2.4b of the report was mislabeled. The table is titled “Maximum Exemption Amount by Exemption Type.”
However, according to Robert Pauley and confirmed by David Dude, the City Schools of Decatur Superintendent, the table should be labeled for what it shows: property valuations — or what a property is worth.
Utz agreed with a sentiment held also by Dude: although the title of the table may be incorrect, the story the data tells remains the same, which is that the exemption did not benefit the school district.
The final concern raised by Robert Pauley is that the report does not accurately count Decatur’s senior population. If this were true, the data could be skewed falsely representing how many homeowners in Decatur are seniors, therefore inflating the number of parcels that should be tax-exempt.
Pauley claimed that “the 18% [cited in the report] of the owner-occupied parcels in Decatur being 65 year old senior citizens (1321 of 7380) taking the … property exemption is a very odd number and obviously exaggerated. It makes the report’s accuracy uncertain.”
However, Utz rebutted this claim, stating that it didn’t seem “obviously exaggerated” at all. Citing a 2018 study by the Joint Center for Housing Studies of Harvard University, Utz said, “The national average for senior homeownership is around 31% for people age 65 and older, making Decatur already substantially below the national average at the 18% presented in the report. I find the report’s calculations reasonable and credible. I’d be interested to see what information Mr. Pauley has to support his claim that it is exaggerated.”
Utz also said, “There is always a caveat when it comes to detailed data based upon the tax digest: it is difficult to keep property designations and statuses perfectly up to date, often properties can change hands more than once per year, some properties have grandfathered designations, etc., and consequently there is always a lot of ‘noise’ in the detailed digest data.”
He said because of this, it’s important to look at the larger picture of what data may be representing.
“It is why the report itself repeatedly caveats the specifics of the data and instead references the big picture, which remains consistent regardless of the details: it appears that the exemption failed to achieve its objectives,” he said.
Dude stood by the report in an exchange with Robert and Adele Pauley several months ago.
In addition to the report itself, Dude said there is still more to come in evaluating the effectiveness of the exemptions and the next steps that CSD will take.
“This study is the first step in reviewing CSD’s approach to senior homestead exemptions. … The school district and city will get together to put together a stakeholder engagement plan,” Dude said.
Their plan is to seek feedback from the community and continue to develop a legislative plan into late next year.
“That plan will layout the next steps in gathering input from the community,” Dude said. “Following that input, the school district and city will work on a plan for potential legislation regarding future senior homestead exemptions. We hope to have that work completed by the fall of 2020.”
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Correction: An earlier version of this story misidentified someone in a photo caption. This story has been updated with the correct information.